Cost of Living: Households already owe £1,300,000,000 on utility bills

EMBARGOED TO 0001 WEDNESDAY AUGUST 10 PICTURE POSED BY A MODEL File photo dated 08/01/22 of a person holding an energy bill. Households already owe their utilities €1.3 billion two months before bills are set to soar by more than 80%. The total debt bill is already three times what it was a year ago, experts at Uswitch said on Wednesday, and it looks likely to rise further into the winter. Issue date: Wednesday August 10, 2022. PA Photo. According to a survey by the company, six million households across the UK owe their utility company an average of £206. In April the same average debt was £188. See PA story CONSUMER Bills. Photo credit should read: Danny Lawson/PA Wire

Households already owe their energy suppliers £1.3billion (Image: PA)

Millions of households across the UK are already in debt to their energy supplier, with households owing £1.3bn two months before bills are expected to soar by more than 80%.

The total debt bill is already three times what it was a year ago, according to experts at Uswitch, and it seems likely that it will continue to climb over the winter.

Six million households owe their utility company an average of £206, according to a survey by the company. In April the same average debt was £188.

Usually at this time of year people have built up a small war chest to offset increased bills during the winter months.

Regulator Ofgem is expected to raise the price cap on energy bills for the average UK household to £3,582 a year from early October, according to a new forecast.

Analysts at Cornwall Insight were forecasting further increases to £4,266 in January and then £4,427 from early April.

“Energy debt has reached an all-time high at the worst possible time, making this winter’s energy price hike an extremely precarious situation for many households,” said Justina Miltienyte, Uswitch’s head of policy.

“This is an alarming situation as summer is traditionally a time when homes use less electricity for heating, helping billpayers build up energy credits ahead of winter.”

On Tuesday, Martin Lewis urged Tory leadership candidates Rishi Sunak and Liz Truss to “stop ignoring this ominous national catastrophe” and pledge immediate relief to those affected.

It follows Tony Danker, director-general of the Confederation of British Industry (CBI), who said on Tuesday that the prime minister and the two candidates to succeed him “should come together to agree a common pledge to support people and allay fears”.

The two rivals vying for the post of next prime minister faced growing demands to formulate how they would help with energy price hikes.

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Mr Lewis tweeted that “the zombie government must wake up sooner than September 5” – when Boris Johnson leaves and the new Prime Minister takes office.

Ms Truss branded proposals to agree with the Government and Mr Sunak on support for rising energy bills before the Tory leadership contest is over as “bizarre”.

The front runner in the race to succeed Mr Johnson as prime minister spoke out as she and her opponent were increasingly called upon to articulate how they will deal with a rise in energy prices.

Mr Sunak, meanwhile, suggested he would not offer more cash payments to every household, instead targeting support to those most vulnerable.

EXETER, ENGLAND - AUGUST 01: Foreign Secretary Liz Truss speaks during the Conservative Party's Second General Assembly on August 01, 2022 in Exeter, England. Conservative party leadership hopefuls Liz Truss and Rishi Sunak will attend the party's second general meeting in Exeter tonight. (Photo by Finnbarr Webster/Getty Images)

Ms Truss branded proposals to agree with the Government and Mr Sunak on support for rising energy bills before the Tory leadership contest is over as “bizarre” (Image: Getty).

The government has already promised every household £400 and extra help for the most vulnerable.

The Uswitch survey found that eight million households are left with no credit and therefore no cushion against the winter misery.

Almost one in five (18%) said they were concerned that their provider would force them to take a prepayment meter if they were late on bills, although 38% said they were unaware their provider was doing this could.

“If you’re behind on your bills or have debt on your energy account, speak to your provider as soon as possible,” Ms Miltienyte said.

“They should be able to help you find a solution, like working out a more affordable payment plan. You may also be eligible for additional assistance such as hardship funds and other energy assistance programs.

“Government must also take pre-winter energy debt seriously – and a larger support package for vulnerable households must be agreed as a priority.”

Tense multiethnic couple reading bills at home

There are several ways for customers to save on bills (Picture: Getty Images)

There are several ways for customers to save on bills. One of the simplest is to turn down the flow temperature on your condensing combi boiler.

This allows the boiler to run more efficiently and saves around £200 on an average energy bill.

Another simple saving is turning off the preheat mode on the boiler, which could mean hot water taps take longer to heat up but could save hundreds of pounds a year.

Experts also advise households to check if they are eligible for additional support.

Get in touch with our news team by emailing us at webnews@metro.co.uk.

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https://metro.co.uk/2022/08/10/cost-of-living-households-already-owe-1300000000-on-energy-bills-17157306/ Cost of Living: Households already owe £1,300,000,000 on utility bills

Justin Scacco

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